Transcript of "Introduction To Grant Budgets"

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What is a Grant Budget? <ul><li>It is simply the process of translating the project plan into fiscal terms. </li></ul><ul><ul><li>How much will it cost to successfully complete your project/program? </li></ul></ul><ul><ul><li>Where will the money come from and how will it be used? </li></ul></ul><ul><li>It is critical to the success of the grant proposal that the project budget reflects and supports statements made in the project narrative. </li></ul>

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WARNING! <ul><li>Funders judge whether or not you have the capability to run your project/program through the budget. </li></ul><ul><li>Mistakes made in a budget can result in your organization being professionally and legally committed to a project whose resources are inadequate. </li></ul><ul><ul><li>Plan the budget carefully. </li></ul></ul><ul><ul><li>Be as realistic as possible. </li></ul></ul>

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Before You Begin <ul><li>Learn the ground rules from both your organization and your funder. </li></ul><ul><ul><li>Check with your organization to find out how budgeting works (indirect costs, benefits, etc.). </li></ul></ul><ul><ul><li>Check your funder’s requirements to make sure you understand their process and don’t ask for something they don’t fund. </li></ul></ul>

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Steps in the Budget Development Process <ul><li>Step 1: Identify the total costs of the project. </li></ul><ul><li>Step 2: Arrange items by category, by time frame, and by anticipated source. </li></ul><ul><li>Step 3: Transfer your data into the format requested by the funder. </li></ul>

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Step 1: Identify Total Costs <ul><li>Go through each section of your narrative and brainstorm costs involved. </li></ul><ul><ul><li>List all anticipated costs </li></ul></ul><ul><ul><li>Examples might include staff, equipment, transportation, etc. </li></ul></ul><ul><ul><li>Include costs even if they are in kind (i.e., volunteers, books, materials, etc.) </li></ul></ul><ul><ul><li>Try to think of everything that will be needed </li></ul></ul>

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Direct Costs <ul><li>Expenses directly attributed to the project/program: </li></ul><ul><ul><li>Personnel (salaries/wages, benefits) </li></ul></ul><ul><ul><li>Contract services </li></ul></ul><ul><ul><li>Travel and per diem expenses </li></ul></ul><ul><ul><li>Facilities </li></ul></ul><ul><ul><li>Equipment, supplies/materials </li></ul></ul><ul><li>Check with your organization to find out about benefits, per diem, etc. </li></ul><ul><li>Check with funder to find out what is covered </li></ul>

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Indirect Costs <ul><li>Costs related to the infrastructure necessary to support the program/project, but are difficult to separate out (also called overhead costs). </li></ul><ul><ul><li>Lights, heat, rent, depreciation of equipment, etc. </li></ul></ul><ul><ul><li>Usually calculated as a percentage of the direct costs (check with your organization to see what they suggest). </li></ul></ul><ul><li>Check with funder to find out what is covered. </li></ul>

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Project Teams <ul><li>Choose a simple project that you want to be grant funded </li></ul><ul><ul><li>1-3 years in length </li></ul></ul><ul><ul><li>Concrete, attainable objectives </li></ul></ul><ul><li>Examples: 1 week diabetes camp for youth, single parent monthly support group, fall prevention training for nursing home staff, etc. </li></ul><ul><li>Brainstorm all the costs involved in the project </li></ul><ul><ul><li>List out any and all ideas </li></ul></ul>

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Project Teams <ul><li>Organize your brainstorm ideas into categories, by time, and by source. </li></ul><ul><ul><li>Use general categories (personnel, other expenses, indirect expenses) and then break down further. </li></ul></ul><ul><ul><li>If your project spans more than one year, estimate costs per year. </li></ul></ul><ul><ul><li>What other sources of revenue do you foresee (in kind, other grant awards, other possible sources of funds)? </li></ul></ul>

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Budget Considerations <ul><li>Research costs to keep the numbers as realistic as possible. </li></ul><ul><li>Research the funder to know total dollars available, minimum/maximum awards, average award, whether they have funded what you are asking for. </li></ul><ul><li>Consider asking for no more than the average grant amount. </li></ul><ul><li>Continually review, revise, and refine the budget. </li></ul><ul><li>Asking for a specific amount ($18,750) instead of a round number ($20,000) makes your request look more authentic and less impulsive. </li></ul>

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Project Teams <ul><li>Transfer your data into the Endowment for Health spreadsheet. </li></ul><ul><li>Look at examples to see what is included and how it is listed. </li></ul>

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Budget Narrative <ul><li>The budget narrative (justification) expands on line items, explaining how you arrived at dollar amounts and giving enough detail to tie the costs to the project’s activities and goals already described. </li></ul><ul><li>As with the entire proposal, budget narratives should be clear and concise. </li></ul><ul><li>Look at the Endowment for Health example to see how this funder expects the budget justification to be written. </li></ul>

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Red Flags in the Budget Narrative <ul><li>Three additional considerations will help the narrative avoid raising any unnecessary red flags. </li></ul><ul><ul><li>Make sure the narrative matches the line-items exactly (do your addition correctly). </li></ul></ul><ul><ul><li>Make sure the total amount is commensurate with the outcomes of the project/program (the amount should make sense in terms of what you propose to do). </li></ul></ul><ul><ul><li>Use fair and reasonable costs (do your homework). </li></ul></ul>

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Final Budget Checklist <ul><li>Tells the same story as the proposal narrative. </li></ul><ul><li>Sufficient to perform all the tasks in the proposal narrative. </li></ul><ul><li>Contains no unexplained amounts or a miscellaneous category. </li></ul><ul><li>Includes only those costs to be incurred during the grant period. </li></ul><ul><li>Follows funder guidelines. </li></ul>

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Grant Award Negotiation <ul><li>When the award is substantially the same as specified in the original proposal, no negotiation is needed. </li></ul><ul><li>A funding agency may decide to support a project at a different level from that requested (usually at a reduced level). </li></ul><ul><li>Negotiation process: </li></ul><ul><ul><li>Notification from funder </li></ul></ul><ul><ul><li>Involvement of institution </li></ul></ul>

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Step 1: Develop a Realistic and Defensible Plan <ul><li>Good budget planning is a key part of budget management. </li></ul><ul><li>Know your grant budget. </li></ul><ul><li>Read the fine print to make sure you know what the funder is requiring of you. </li></ul><ul><li>You cannot change your mind after the grant is approved. </li></ul><ul><li>Grant dollars must support the program and must be spent for the services and commodities specified in the grant application. </li></ul>

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Pay Attention / Carefully Monitor Progress <ul><li>Reporting </li></ul><ul><li>Develop a system to deliver timely, accurate information in easily interpreted formats. </li></ul><ul><li>Reports should contain three easily identifiable numbers: list of expenditures to date in identified accounts, projected costs, remaining balance in each account. </li></ul><ul><li>Reports should show whether the grant will be over or under spent. </li></ul><ul><li>Keep the funder informed if there are potential problems. </li></ul>

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Step 3: Manage the Unexpected <ul><li>DO </li></ul><ul><li>Look for early problems and develop possible solutions. </li></ul><ul><li>Alert your institution. </li></ul><ul><li>Ask for help from your organization and from the funder </li></ul>

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Manage the Unexpected <ul><li>DO NOT </li></ul><ul><li>Rob Peter to pay Paul (cost transfers). </li></ul><ul><li>Ignore the problems and hope they’ll go away. </li></ul><ul><li>Hurry up and spend money at the end of a contract. </li></ul><ul><li>Assume that your organization will cover cost overruns. </li></ul><ul><li>Lie! </li></ul>